Cycle Trading

A 23 day-daily cycle low printed on Wednesday.
Thursday formed a swing low.

Friday, day 2, saw a trend line break confirming a new daily cycle.
This was (probably) the first daily cycle of a new intermediate cycle.
Since this first daily cycle was right translated, the expectation is for the new daily cycle to print a higher high.
As we will discuss in a minute, there is an expectation for the dollar to print left translated intermediate cycles, which will translated to left translated daily cycles.
There is fairly good odds the dollar’s daily cycle will peak by day 8.
I expect to see the dollar to confirm an intermediate cycle before peaking.

The intermediate cycle likely printed its low in September.
That makes this week 5.
The dollar still needs to break above 80.42 to form a swing low and break above the declining trend line to confirm a new intermediate cycle.
Once a new intermediate cycle is confirmed, the dollar will likely run into resistance at the 81 level.
Notice how the dollar broke below the trend line leading from the three year low.
That signals the three year cycle is in decline.
Therefore we can expect that all intermediate cycles should now form as left translated.
Left translated IC’s usually peak by week 8.

My studies show that between 1978 and 2008 there have been 40 left translated intermediate cycles.
During that period 87 % of left translated daily cycles peaked by 8 weeks and 95 % of left translated weekly cycles peaked by week 10.

The Yearly dollar cycle peaked on month 5.
A swing high formed on month 6 and there has now been more follow though to the downside.
The dollar has entered its primary decline into its yearly cycle low. As the dollar seeks out its yearly low we can expect intermediate cycles to form as failed, left translated cycles where the surprise should come to the downside.

Stocks

This week equities tried to regain the daily cycle trend line and were soundly rejected.

The day 8 peak means that this cycle is forming as left translated, which should break below the previous daily cycle low.
Failed left translated daily cycles are the hallmark of an intermediate cycle decline.
The timing band for an equity daily cycle low is 35 to 45 days. Which means we can look for a low to be printed in the next 2 to 12 days.

The weekly equity cycle stands at week 19.
Last week saw a trend line break and weekly swing high form.
The equity daily cycle should find it low over the next 2 weeks, which will take the weekly cycle to either week 20 or 21 — right in the timing band to print an intermediate cycle low.

The dollar’s intermediate cycle should form as left translated and peak in the next few weeks as well.

Things are lining up for when stocks print its daily cycle low, it will likely also mark the intermediate cycle low.

The yearly cycle currently has a peak on month 3 and is working on month 4.
With equities seeking out an intermediate cycle low, the October monthly print will likely be seeing more red.

Gold

Friday was day 17 for gold’s daily cycle and we saw gold begin to accelerate into its intermediate cycle low.

Monday will bring the start of gold’s timing band to print a daily cycle low.
We will likely see gold continue to sell off as long as the dollar is rallying.

A cycle peak at week 20 coupled with a failed daily cycle has gold seeking out its intermediate cycle low.
Gold has now broken below the 10 week MA that is characteristic for an intermediate cycle decline.

When gold prints its daily cycle low it will also likely mark the intermediate cycle low. At this point we do not know at swat level gold will bottom. I do think if gold gets in the vicinity of the convergence of the 20 & 50 weekly moving averages that we will have a “Blue Light Special”.

The gold yearly cycle stands at month 5.

I included the 10 month moving average in this chart.
It is interesting to note that gold held above the 10 month MA besides when gold dipped down into a 4 year cycle low.

The Miners

The current daily cycle for the Miners peaked on day 3 and has been trending lower since.
The Miners started off this week by breaking below the previous daily cycle low established back on 9/26 producing a failed daily cycle.

Friday, day 17, saw the Miners make a lower low and appears to have printed a reversal candle.
It is entirely possible that the Miners bottomed on Friday.

Since the 2008 bottom 13 of the 16 left translated daily cycles for Miners have printed a low on or before day 23.
If the Miners break above Wednesday’s intra-day high of 512.11 that would signal that last Friday was a 17 day-daily cycle low.
I would like to see a trend line beak to confirm a new daily cycle.
I think that with the dollar rallying and equities declining that Miners still are at risk for more down side.

However it is worth noticing the relative strength the Miners have compared to gold and remembering that the Miners often lead gold out of a bottom.

Notice how gold had a marginal break of the previous daily cycle low on Monday and an accelerated follow through on Friday.

In contrast, the Miners had only a marginal break of the previous daily cycle low on Monday & Friday and Friday closed in the green.

SIL is holding much better. It did not brake a below the previous daily cycle low.
It appears to be in a triangle consolidation with Friday possibly being the daily cycle low.

Silver Wheaton also appears to be in a triangle consolidation with Friday also looking like a possible daily cycle low.

Last week was week 22 for the Miners intermediate cycle.
The Miners have a weekly swing high and trend line break and is now hunting its intermediate cycle low.

The Miners yearly cycle currently has a peak on month 4 with October being month 5.
October appears to be back-testing the declining trend line.
A reversal higher off the declining trend line would be incredibly bullish for the Miners

The CCI

The CCI appears to have printed a 13 day-daily cycle low on Monday.

A swing low formed on Wednesday with Thursday providing a break through the declining cycle trend line.

The weekly CCI cycle looked to have bottomed on week 17 with a weekly swing low forming the following week.

With a tad more weakness the CCI will break below the week 17 low and then we will label last week as week 20.

Should the CCI break higher, then week 17 will remain labeled weekly cycle low.

The Yearly cycle has run into stiff resistance from the declining trend line.
When the CCI confirms a new intermediate cycle, that should provide the energy needed to break through the declining trend line.

Bonds

The dollar bottomed on Wednesday printing day one on Thursday and we see bonds bottoming on Thursday and printing day one on Friday.

Friday formed a swing low and a trend line break confirming a new daily cycle.

With the dialy bond cycle commencing a new daily cycle, that gives clarity to the weekly cycle.

The new daily cycle should have TLT break convincingly above the declining cycle trend line to confirm the intermediate cycle.

While bonds are on the verge of confirming a new intermediate cycle, it appears that the new daily cycle really will be short lived.

TLT peaked on month 4 and has been locked in a yearly cycle decline.
That suggests that intermediate cycles will continue to form as left translated cycles.